What goes out, or cost control is the second focus area. A mentor recently remarked, "The only thing a business must make is PROFITS!" While a business cannot survive long term solely on cost cutting activities, business costs are a very important focus when establishing a stream of profits, or golden eggs.

This is the bare cost to provide value to your customer. For example, when you make a fly swatter, some of the direct costs are the plastic and metal materials, the labor to put the pieces together, and the electricity to power the necessary machines.

"Margin" is what is left after the direct costs are deducted from the sales price. This amount is a "contribution" toward the indirect costs of the business. Hence the term, "contribution margin." One example of an indirect cost is the shipping department.

PROFITS are what is left, only after all costs are covered.

Your Golden Goose Business Coach can help navigate the bewildering path to a stream of Golden Eggs.